In 2011, health system leaders recognized that merger-and-acquisition activity was imminent and established a dedicated team within the revenue cycle department to work closely with legal, internal auditing, and financial reporting colleagues.
During the past seven years, Danville, Pa.-based Geisinger Health System has maintained strong revenue cycle performance through multiple integrations following mergers and acquisitions (M&As). In fact, leaders at the large, integrated health services organization were able to return the organization to its previous levels of performance within 90 days or less during these mature, or past, integrations. This strong performance continues today: Geisinger was one of four integrated delivery systems to earn HFMA’s MAP Award for High Performance in Revenue Cycle in 2017.
Geisinger launched a wave of (M&A) activity in 2011 when it acquired Community Medical Center, Scranton, Pa., and Bloomsburg Hospital, Bloomsburg, Pa. In 2013, Geisinger acquired Lewistown Hospital, Lewistown, Pa., and then merged with Holy Spirit Hospital, Camp Hill, Pa., a year later.
In this article, Barbara M. Tapscott, Geisinger’s vice president of revenue management since 2008, shares some of her organization’s strategies for success as well as lessons learned from these mature integrations.
Building Internal Teams
In 2010, leaders at Geisinger recognized that M&A activity was imminent and established a dedicated M&A team within the revenue cycle department.
To staff the team, Tapscott selected leaders who had previous expertise in conducting due diligence when the health system acquired new clinics or hospitals. “We wanted resources who were experienced in project management and who were very well versed in change management so that we could be thoughtful and intentional about what we were doing within the parameters of Geisinger policy, accepted accounting principles, regulatory compliance, and internal controls,” Tapscott says.
During the integrations with Community Medical Center, Bloomsburg Hospital, Lewistown Hospital, and Holy Spirit Hospital, the revenue cycle M&A team worked closely with legal, internal auditing, and financial reporting colleagues. Today, the team—which reports directly to an assistant vice president of administrative services—is empowered to tap resources from whatever revenue cycle discipline they need to gather information, document current state, and identify risks. “Their work may result in our engaging additional stakeholders within Geisinger or external resources if we believe the investment is warranted,” she says.
The M&A team has helped revenue cycle leaders achieve their key objectives during these mature integrations, Tapscott says. “Our goal is to complete as much due diligence as possible so we understand where the opportunities are,” she says. “The internal team works on identifying potential risks and variations from best practices, including analyzing the total component of human resource allocation by job description.” The team also has analyzed job descriptions between organizations for parity and to make sure staff are compensated appropriately.
Another goal during these mature integrations has been to create plans to achieve best practice performance, Tapscott says. “We typically develop those plans in collaboration with our business and strategy department, so that as the transactions are completed, we also know at a high level what the investment will need to be to bring a facility up to the Geisinger standard if it is in need of investment,” she says. During the integrations completed between 2011 and 2014, the most significant investments were in electronic health records (EHRs), which allowed the health system to scale their revenue cycle processes in areas like billing and collections.
To assist with these IT migrations, Geisinger has an internal IT systems support team that reports up to the administrative services department in the revenue cycle. During the due diligence period, this IT team helps revenue cycle leaders understand how technology platforms vary between Geisinger and their partner organizations. This internal team also works closely with the broader IT department to manage the migration and setup of new technology, including EHRs and billing platforms. “That has worked well for us,” Tapscott says.
This internal IT team coordinates staff training on using new technology when migrating these organizations to the shared platforms for contract management and insurance verification. The team also validates that any ancillary technologies—such as for diagnostic services or management use—conform to Geisinger standards and best practices.
Creating Effective Integration Strategies
To ensure the strongest possible performance during these mature integrations, leaders at Geisinger evaluated legacy accounts receivables (A/R) and liquidated that book of business while they trained new staff on standardized workflows and Geisinger’s policies. “Outsourcing the legacy A/R has been a strategy so we don’t dilute the training or investment in the new system,” Tapscott says. “We’ve had very positive results—we’ve resolved legacy A/R in 90 days,” she says. “That allows staff to concentrate on their new tasks if they are adapting to new jobs or new technology.”
Reallocating staff also has been a key strategy during these implementations. “There’s always attrition with a big change,” Tapscott says. “But we reinforce that the goal is not to reduce resources but to improve performance. When we go into most of our acquisitions, what we find is that in smaller hospitals in particular, people are wearing different hats, and the multiplicity of tasks results in some dilution of performance. Our consolidated business office and our technology platform allow us the ability to scale so that we don’t need as many resources for back-office functions, such as billing and collections.” As a result, many back-end staff have been shifted to front-end processes as part of Geisinger’s pre-service financial clearance unit, located in the consolidated business office. “We have migrated some of the resources to the front end for scheduling, verifying insurance verification, obtaining authorization for services, and ensuring charges are captured correctly,” she says.
This approach has helped revenue cycle leaders retain valued staff who understand the culture and inner workings of their own hospital or clinic, she says. For example, reallocated staff working in new roles as financial counselors may collect payments and leverage their new training to enroll uninsured patients in state programs, if available.
Leading a Post-Implementation Review
Following these mature integrations, revenue cycle leaders at Geisinger conducted post-implementation reviews, which often took six months or longer. This involved validating that all processes and new technologies were working as designed, Tapscott says. For example, leaders validated proper charge capture, claim generation, and payments received.
During these transitions, Tapscott kept a close eye on key performance indicators, such as discharged not final billed (DNFB) cases and net days in A/R. Each month and quarter, her team reported its results.
“My goal is to return to normal state within 90 days, and we have done that sooner in some cases,” she says. “Obviously, sooner is better, but we want a quality output. Sometimes, you don’t know what you don’t know, no matter how much you plan. So my goal is to be very methodical about it, and that approach has paid off.”
Heeding Lessons Learned
Tapscott offers the following advice for organizations on maintaining strong revenue cycle performance during integrations.
Understand the current state before making changes. “In revenue cycle management, details, processes, and workflows are very important to ensure that when we replace something, we are doing it very intentionally, without losing any opportunity for improved performance,” she says.
Allow plenty of time for training. “Training takes many forms, including onboarding folks into the Geisinger culture,” Tapscott says. “It is not just billing and collections or registering patients, but how we treat our patients and each other and the minimum expectations regarding a code of conduct. That all takes time.”
Report progress frequently. During integrations, Geisinger leaders worked closely with their corporate communications and legal departments to spread the word in their newsletters about upcoming changes. As each integration unfolded, leaders also offered clear, consistent updates during staff meetings and training sessions.
Preparing for More Work Ahead
In the future, Tapscott and her team will be focused on their more recent integrations with Egg Harbor Township, N.J.-based AtlantiCare, which was acquired in 2015. For the AtlantiCare merger, “We are looking for opportunities to learn from each other,” Tapscott says.
Geisinger’s 2017 integration with Jersey Shore Hospital and Foundation is even newer, with an IT migration slated for later this summer.
As each implementation moves forward, Tapscott and her team will leverage their experience with previous successful integrations. Over the years, she has learned that strong project management and change management skills can help mitigate staff unease during integrations.
“There is obviously a level of insecurity with a merger or an acquisition,” she says. However, being open and transparent in reporting progress and challenges can help build trust. “I cannot underestimate the importance of communication across all levels,” Tapscott says.
Read an HFMA/Deloitte report “Hospitals M&A: When done well, M&A can achieve valuable outcomes” at hfma.org/mergers. And listen to HFMA’s three-part podcast series on M&As.
Interviewed for this article:
Barbara Tapscott, CHFP, is vice president, revenue management, Geisinger Health System, Danville, Pa., and a member of HFMA’s Northeastern Pennsylvania Chapter.